Foreign Exchange Rate & Market Quiz

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10 Questions

What is the primary difference in transactions between domestic and foreign residents in an open economy?

The involvement of foreign currencies

Where does the foreign exchange market physically take place?

It is not a single physical place

What is the primary function of an exchange rate?

To translate between different currencies

How can the price of one country's currency be expressed?

Both (a) and (b) are correct

What is the primary topic discussed in the given text?

All of the above

What does a rise in the Ethiopian birr per US dollar exchange rate from 9.22 to 9.30 indicate?

The birr has depreciated in value relative to the US dollar

If the exchange rate is expressed as the price of the foreign currency in terms of the domestic currency, what does an increase from $0.11 per birr to $0.12 per birr signify?

The birr has appreciated in value relative to the US dollar

Which currency is described as a "vehicle currency" in the text?

The US dollar

According to the passage, which of the following is NOT mentioned as one of the most important foreign exchange centers?


What has further facilitated communication among foreign exchange participants and economic agents, according to the text?

The current development in Information Communication Technology

Test your knowledge on the foreign exchange rate and market in an open economy. Learn about the differences in transaction of goods and services between domestic and foreign residents, as well as the involvement of foreign currencies in international trade.

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